Government Policies and the Budget Process

Abstract

The first section of this paper (related to the theme of governance) deals with the need for a monocratic budgetary process by the executive, for the proper allocation and management of budgetary resources. The second section (related to the theme of financial management) deals with the basics of public expenditure in relation to: (i) aggregate fiscal discipline, (ii) allocative efficiency, and (iii) operational efficiency. The paper then proceeds to discussing, in turn, the requirement of transparency and financial accountability; the role of a top-level independent national auditing office; the role of the central government as supplier of priorities; and the issue of how the executive branch of government should keep its budgetary commitments, through realistic forecasts, prudential policies, and determination to carry out its fundamental choices. The paper concludes with an evaluation of budget implementation in terms of: the execution of natural strategies; the implementation of the basic allocational choices; and the performance of government bodies